Market Overview

SGD/CHF tells us that money is leaving Europe. Still.

SGD/CHF tells us that money is leaving Europe. Still.

While probably not a favortie pair of yours, the SGD/CHF pair is one of mine. The reason is several-fold to be honest, as I can rely on it for a couple of things. The first thing in my opinion is that the pair tends to trend for long periods of time, and because of this, I tend to trade it from the longer-term charts. However, there are a couple of other things to think about when looking at this market as well. 

The Singapore dollar can be thought of as a proxy for Asian growth in general. This is because a lot of financing in Asia gets done in Singapore. Also, you can think of this as an "Europe vs. Asia" pair also. In other words, how are the two regions doing overall? 

I like the fact that the Singapore dollar represents growth in the emerging markets as well. There aren't too many "old world" countries that are more stable than Switzerland, so this is why I believe this pair has a "risk appetite" aspect to it. Money tends to move from the old world to the emerging world when traders feel comfortable about economic prospects.

Looking at the chart, you can see we have recently tried to break above the 0.75 level. The resulting shooting star shows that there is a significant amount of resistance at that level, but I believe we will eventually see a breakout above that area. Nonetheless, I also believe that that 0.74 level should show support, so pullbacks should be buying opportunities. I also see the 50 day EMA as being supportive, as shown on the chart by the blue line. 

With the Swiss sending roughly 85% of their exports into the European Union, I believe (and so does the market in my opinion) that the Swiss economy is going to be hurt. With this, it makes sense to me that the pair should continue higher. I think we will see 0.77 hit soon.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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